Tuesday, July 19, 2011

Tax Foundation Map of State and Local Tax Rates

From the Tax Foundation, the map above shows the "state-local combined sales tax rate" by state, ranging from a low of 0% in Montana and Oregon, to a high of 9.44% in Tennessee, followed next by California with 9.08% and Arizona at 9.01%.

This chart is interesting, but misleading. Tennessee does have a high sales tax, but no income tax.

IMO, a more meaningful chart would be total state and local tax burden - including sales, property, income, and all other taxes - as a percent of state GDP. I recall seeing such a chart, but I don't recall where.

Larry G: 'ALL of it comes from taxpayers paying local and state taxes."

I agree. But the effect of each type tax is not the same. Property taxes tend to discourage capital investment. Graduated income taxes motivate high income workers to relocate to other states. Sales taxes, on the other hand, are most visible to those who ultimately bear the burden.

As I see it, sales taxes are the least harmful to economic growth but the most harmful to politicians' desire for power.

Thanks for sharing the link. Tennessee moves from the #1 sales tax state to #47 overall. Since TN is a high tourist state, this makes sense. As former governor Ned Ray McWherter said: "I'd rather pick a Yankee than pick cotton."